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TMI Blog2017 (6) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee as well as shared the responsibility of guarantee payments and supply of goods. The Assessing Officer issued summons to brokers out of which five brokers appeared and confirmed having received the commission of 3%. One Shri Pankaj Somani stated to have earned 1% commission and Ashma Shah stated that she did not remember having done any business with the assessee-firm. The Assessing Officer proposed to disallow part of the commission. The assessee relied on AY 2007-08 where the ld. Assessing Officer restricted the commission to 1% by following observations:- "4.11 As regards the assessee's AR's plea that it is not the responsibility of assessee to see that broker to whom summons are issued also attend the office, the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is to be mentioned here that disclosure of higher rate of G.P would not justify the brokerage payment because the payment of brokerage has no nexus with gross profit margin. Having regard to all these facts of the case, I hereby consider the brokerage payment at 1% as reasonable. Therefore, brokerage payment in excess of 1% paid to above mentioned parties amounting co Rs. 19,33,655/- is disallowed and added back to the total income of the assessee. Penalty proceedings U/s.271(1)(c) of the Act are separately initiated on this issue." 3. Aggrieved, the assessee preferred first appeal where ld. CIT(A) considered various facts and gave findings of fact that...... (i) The facts of this year are clearly distinguishable from AY 2007-08; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the facts of AY 2007-08 are clearly distinguishable to the facts of AY 2009-10. The Assessing Officer has demonstrated in paragraph 4.9 in his order that the assessee has purchased goods only from one party M/s. Kalpana Textile through five brokers which is not a business reality. A comparable case was also cited in the case of M/s. D.S. Silk Mills who paid brokerage 0.50% to 1% in AY 2009-10 and in the case of Mohit Rayons, the brokerage paid was at 1%. The assessee has thus not demonstrated any comparable instance and has not disputed the facts mentioned by Assessing Officer in paragraph 4.9 and 4.10 of his order. Consequently, the ratio of ITAT judgment in AY 2007-08 cannot be applied. 7. I have heard the rival contentions, perused ..... X X X X Extracts X X X X X X X X Extracts X X X X
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